While markets are frantically watching the escalation in the Middle East, I am leading you to the true epicenter of instability — Japan's bond market. Bitcoin, which crashed to $62,000, is merely a reflection of the deep-seated processes unfolding on Tokyo exchanges. Geopolitics here is just a facade.
Prominent analyst Michaël van de Poppe directly stated that the current correction has little to do with events in the Persian Gulf region. The real trigger is the historic volatility in Japanese government bond (JGB) yields. On July 9, the yield on 10-year bonds surged to 2.9% for the first time in 30 years, then collapsed by 16 basis points to 2.71% in less than a day. This is the largest single-day drop since April 2025. For 30-year bonds, the decline was 13 basis points, to 3.87%.
Mechanism of Impact on Bitcoin
The reversal occurred after Japan's Finance Minister announced incentives for pension funds, including the giant GPIF with $1.8 trillion in assets, to increase investments in domestic assets. This could lead to a redirection of capital from foreign securities into JGBs, reducing pressure on the yen and domestic debt. However, for the risk asset market, including Bitcoin, this came as a shock.
Van de Poppe draws parallels with April 2025, when 30-year JGB yields rose by 100 basis points after Trump announced global tariffs. Back then, all markets followed Japan's debt. The expert expects yields to reverse downward within one to two weeks, which would automatically trigger a Bitcoin rally. At the time of writing, BTC is trading around $62,700.
On-Chain Background: A Bearish Context
Regardless of external factors, the internal structure of the Bitcoin market remains fragile. Analyst under the pseudonym Darkfost points to a critical signal: short-term holders (STH) have been underwater for over nine months — the asset's price is trading below their average cost basis of $70,700. This level continues to act as strong resistance.
The main problem is weak spot demand. The 30-day moving average of the demand metric has been negative since December 2025. In mid-June, the indicator hit a low of -273,000 BTC, and it is now around -100,000 BTC. Speculative demand flowing into futures is unable to sustain a stable reversal. Until this dynamic changes, Bitcoin's underlying trend will remain negative.
Meanwhile, CryptoQuant analyst Zizcrypto notes partial normalization: the Composite Index v.2.0 stands at 0.484, below the elevated risk zone but above the bottom levels of past cycles (0.13 in November 2022). This suggests a partial reset rather than a deep macro correction.
My Expert Opinion: The market is trapped in macroeconomic uncertainty. Japanese debt is the "silent killer" of risk assets. Until JGB yields stabilize, Bitcoin will remain hostage to volatility on the Tokyo Stock Exchange. A breakout above $76,600, as discussed by Glassnode, is only possible after Japanese yields reverse downward. Until then — keep your cool and watch the bonds, not the headlines.